Effects Of Shocks Research Articles

The Role of Household Heterogeneity on Unplanned Water Demand Shifts

In this study, we investigate whether differences in sociodemographic and housing characteristics may lead to heterogenous reactions on water demand across households in the event of an unexpected shock. In this sense, we estimate a switching regression model for residential water usage in Gijón, Spain, between 2017 and 2021, exploiting the exogenous impact of the COVID-19 pandemic and various movement restriction phases. A rich dataset that integrates real data on water consumption and pricing, alongside reported household and housing characteristics, allows us to effectively control the heterogeneity of water consumers and test changes in marginal effects over time. Our findings reveal a significant increase in average water consumption coinciding with the onset of the pandemic. This increase in water usage was particularly pronounced among households with more members and those residing in older houses that also owned outdoor amenities such as gardens or swimming pools, among other socioeconomic and housing characteristics. Additionally, our study indicates that the price elasticity of water demand did not significantly differ from zero during the periods of the State of Alarm and the New Normal. This suggests that the implementation of movement restrictions and teleworking may have amplified households’ preferences and dependence on water, thus fostering increased water consumption. Furthermore, our results point towards unchanged residential information or knowledge of the expense of water services despite the time spent at home.

Can loan characteristics cushion the impact of an exogenous shock on subsistence entrepreneurs? Evidence from India

ABSTRACT We study the effect of an exogenous shock (Covid-19) on microcredit repayment behaviour of subsistence women entrepreneurs. We combine big data (Google mobility, Night-time lights and infection rates) with an original panel dataset of 2345 subsistence women entrepreneurs from rural India. Using random effects and hybrid panel regressions, we show that the COVID-19 shock adversely impacted loan repayments. However, the different loan characteristics moderated the impact. Prior to the COVID-19 shock, the repayment behaviour of entrepreneurs with joint liability group loans with group guarantee was better than of those with overdraft facilities, but was no different from individual loans. However, with rising severity of the pandemic, overdraft facility that offered flexible repayments displayed the highest resilience and outperformed joint liability group loan repayments. These findings underscore the importance of flexible loan product design to build resilience of subsistence entrepreneurs to unexpected shocks. Additionally, we show that loan repayment behaviour is positively associated with youth, financial literacy and usage of digital transactions.

The Threshold Effects of Exchange Rates on Agricultural Exports: A Flow from South Africa to the Southern African Development Community

The impact of exchange rates is a significant concern affecting trade in the SADC region. This study’s purpose is to assess the threshold effects of exchange rates on agricultural exports from SA to SADC from 2010 to 2022. A panel threshold estimation technique is applied to assess the exchange rates effects in different regimes that can be below or above the threshold value. This can reveal non-linear relationships that are often overlooked in traditional linear models. In this analysis, exchange rates are disaggregated into appreciation and depreciation, as it is critical to determine how these changes affect agricultural exports, which has not been achieved in previous studies. The findings of this study confirm the existence of a non-linear relationship between several key variables (depreciation, South Africa’s GDP, the GDP of the SADC, and South Africa’s population and agricultural exports). This contributes new insights to the existing literature on the SADC economies. The policymakers could implement an exchange rate stabilisation mechanism and promote the diversification of both market destinations and agricultural export products. The SADC economies could consider adopting flexible exchange rate regimes that respond to market forces, while taking into account external shocks and economic indicators to mitigate the effects of depreciation shocks. Furthermore, the findings from this study can aid policymakers in formulating effective strategies for managing exchange rates fluctuations and promoting agricultural export growth. The findings show that different segments of agricultural exports can inform targeted interventions aimed at supporting exporters, and relevant industries within the SADC region. These results can aid policymakers to develop strategies to support sustainable agricultural practises, and ensure that the sector can meet the growing demands of a larger population.

Microeconomic Shock Propagation Through Production Networks in China

The question of whether microeconomic shocks induce aggregate fluctuations constitutes a central issue in economic research. This paper introduces a general equilibrium model with production networks to explore the propagation mechanisms of microeconomic shocks. A novel triangular production network structure is introduced, and simulations are performed using China’s input-output table to analyze the propagation of these shocks within the Chinese economy. The model demonstrates that the first-order effects of microeconomic shocks propagate downstream along the industrial chain, while the second-order effects of microeconomic productivity shocks propagate both upstream and downstream along the chain. The first-order propagation mechanism of microeconomic shocks involves changes in prices within the affected sector and its downstream sectors. Additionally, the second-order effects of microeconomic shocks rely on the reallocation of factors. The simulation results indicate that China’s production network matrix is triangular, and that the financial sector plays a crucial role in amplifying the effects of microeconomic shocks. Government should prioritize supporting upstream fundamental sectors to mitigate the adverse impacts of external shocks on economic fluctuations and to address systemic financial risks.

THE IMPACT OF THE RUSSIAN-UKRAINIAN WAR ON THE FOOD INFLATION RATE PERSISTENCE IN UKRAINE: A FRACTIONAL INTEGRATION MODEL

This study seeks to test for food inflation persistence in Ukraine using univariate fractional integration techniques. The GPH (Geweke-Porter-Hudak) test and the local Whittle estimator are both methods used in the analysis of time series data, particularly in the context of long memory processes. In addition to measuring the persistence of the food inflation rate using the ARFIMA model, the empirical results suggest evidence of the persistence of low food inflation rate in Ukraine, albeit with the same trend, before and during the Russian-Ukrainian war. Also, the food inflation rate has long-term memory properties, regardless of the sample used. The results show that memory parameters for all cases (Full, Pre-war, and Dur-war) are within the stationary range (0 < d < 0.5) and with almost equal. Nevertheless, the estimates of d suggest that the food inflation rate series exhibit a long memory, that the effect of shocks will eventually disappear in the short run in all cases (Full, Pre-war, and Dur-war). So there is no strong impact of the Russian-Ukrainian war on the food inflation rate persistence in Ukraine. This explains that the Ukrainian government's monetary policy strongly absorbs the shocks and effectively mitigates the impacts of the Russian-Ukrainian war. The ability to also exploit fractional integration in a univariate setup when modeling food inflation is a major contribution of this study, and ignoring the same may lead to wrong conclusions.

Extreme time–frequency connectedness between oil shocks and sectoral markets in the United States

This study assessed the connectedness between oil shocks and industry stock indexes in the United States (US). We consider the normal and extreme conditions across different frequency horizons, and the quantile time–frequency connectedness method is used to determine the tail risk contagion under different frequency horizons. Our results reveal that the short-term frequency connectedness significantly exceeds the long-term frequency connectedness. We also indicate that the connectedness in the lower and upper quantiles is greater than at the conditional mean. Importantly, oil risk shock is the biggest net transmitter of shocks to the US sectors in normal and extreme conditions, highlighting that oil risk shocks cause substantial variations in US sector stock returns in the short, medium, and long term. Finally, QAR(3) model demonstrates the significant impact of oil risk shocks on US sector stock returns during extreme and normal conditions. Therefore, our study underscores the role of asymmetry in the reaction of US sector stock returns to oil-related shocks, and we suggest that policies aimed at overcoming the adverse effects of oil shocks on stock markets and promoting financial stability should incorporate asymmetric features.

Farmers’ desire to make changes in their agricultural branches in the first wave of COVID-19 pandemic restrictions: The example of Türkiye

The coronavirus pandemic and subsequent protectionary lockdowns have negatively impacted farmers, especially those producing perishable agricultural products worldwide and Türkiye. For this reason, most researchers began to investigate the effects of restrictions on agrarian branches during the sudden shocks of the pandemic. This study was carried out to reveal the farmers’ desire for change in agricultural production branches during the period when coronavirus pandemic restrictions were implemented in Türkiye. A survey study was conducted with broad participation and telephone interviews involving 2125 farmers in different production branches in 22 provinces. Nonlinear Canonical Correlation Analysis was used to analyze variables. According to our analysis results, compared with other agricultural branches, it has been determined that the farmers who do vegetable farming, fruit farming, and livestock farming have a higher desire to change their bare agrarian branches. Approximately half of the farmers interviewed reported difficulties obtaining seeds, fertilizers, and chemicals and providing sufficient labor. Due to these difficulties, 16.5% of the farmers stated that if the first shock effect of the pandemic restrictions continues and this shock effect continues, they will abandon the current main agricultural branches of animal husbandry and vegetable growing. Fruit growing and switch to other farming branches that require less input and labor for agricultural production. For these reasons, policymakers should invest more in market-oriented strategies such as input supply, storage of products, logistics, and processing of manufactured products to maintain the supply chain during pandemic periods. Because these strategies require high costs and the necessary knowledge of post-harvest operations, they are investments that individual farmers cannot afford. Our study revealed that the initial shock effect of the pandemic restrictions in Türkiye had a limited impact on the production of agricultural products. Despite this little impact, 87.3% of farmers stated that their income decreased slightly during this period. We foresee that the restrictions made due to the coronavirus pandemic will affect the planning and social policy in the Turkish economy in the coming years. However, this situation will not change the basic structure of Turkish agricultural production and distribution.

The role of health shocks after age 70 on housing and wealth profiles.

We conduct a novel investigation into the effects of uncertain health shocks and medical costs on the life cycle consumption, housing, and saving decisions. Our model aids in understanding the role of health shocks and medical costs after age 70 in explaining the lack of wealth and housing decumulation during retirement. We utilize a comprehensive life-cycle model that includes housing, as well as shocks to house price, labor income, and health. Our model could be useful for policy evaluation and future studies concerning older adults. Our first contribution to the previous literature is modeling the whole adult life-cycle. This enables us to determine whether decisions in youth and middle age are influenced by anticipated health shocks in old age. Our second contribution is modeling housing explicitly with health shocks. Conclusions regarding the savings puzzle may be significantly influenced by the explicit modeling of housing. We develop a more realistic model by relaxing some of the assumptions made in previous studies. We find that health shocks motivate the household to accumulate higher wealth before retirement. Moreover, as health shocks become more severe, individuals reduce their consumption and decumulate less wealth in old age. Health shocks help explain the flat trends observed in the housing and wealth profiles of older adults. The possible health shocks after age 70 affect the decisions in young and middle ages only marginally. The wealth profile in middle and old age is affected by health shocks.

Investigating the Pass-Through Effect of Global Oil Price Shock on Domestic Inflation in Selected African Countries

The large-scale war between Russia and Ukraine has increased global oil prices, signaling a new era of macroeconomic shock management for both developed and developing countries. Consequently, this study investigates the passthrough effect of oil prices on domestic inflation in selected African countries in a single estimation framework using the global vector autoregressive (GVAR) estimation technique. To achieve the objective of this study, country-specific data were gathered from twenty-one African countries and four foreign countries selected based on trade relations. The results from our estimation demonstrate that the domestic general price level in African countries responds to global oil price shocks. Also, like any other part of the world, a disparity-like response is observable for African countries. This is tightly connected to whether the country is a metal-resource-rich, non-rich resource, or oil-rich country. The study thus concludes that positive shocks in the global price of crude oil will worsen the delicate position of the domestic general price level in non-oil-producing African countries. Efforts to minimize the impact of international oil shocks in these countries should center around investment in renewable energy and stabilization of the economy’s supply side through proactive and effective macroeconomic management.

Effects of Climate Shocks on the Dynamism of Agricultural Production in Burkina Faso

ABSTRACTFloods constitute climate shocks that cause both tangible and intangible damage to the agricultural sector. An immediate effect of flooding on the farming sector is production loss. We analyze the effects of flooding on the dynamism of the production of Burkina Faso farmers. To this end, we apply the difference‐in‐differences method to balanced panel data covering the agricultural seasons from 2008 to 2012. Our case study involves farming areas that flooded in 2009. The results indicate that the effects of flooding persist for several agricultural seasons.

Do economic shocks matter to U.S. farm income?

ABSTRACT Analysing the effect of economic shocks on farm profitability is crucial for determining the U.S. farm economy’s vulnerability to macroeconomic changes. Using a structural vector autoregressive model and over five decades of data, we examine the impact and importance of external economic shocks to the U.S. farm economy. Specifically, we measure the short-term and long-term volatility spillover effects on U.S. farm income from shocks in energy markets, exchange rates, and agricultural markets. We find that volatility in exchange rates significantly affects US net farm income fluctuations in the short term. Results also suggest that shocks in the exchange rate are more important than other economic shocks, explaining about 47% of the short-run fluctuation in U.S. net farm income. These results highlight the importance of accounting for macroeconomic shocks to enhance the stability of the U.S. agricultural sector and to improve the accuracy of USDA short-term forecasts and long-term projections of farm income components.

Russia, China and the USA: perception of effects in the corporate bond market

Purpose: is to identify the dynamics of mutual influences and risks in the corporate bond markets of Russia, China, and the United States under conditions of external environmental instability.Methods: the methods of comparative and econometric analysis of daily data from 2016 to 2024 were used, including the average yields of short- and medium-term corporate and the government bonds of the Russian Federation, China and the United States, selling prices of gold, oil, exchange rates, refinancing rates. GARCH models for forecasting the volatility of the index of corporate bonds of the Russian Federation and China under the influence of internal and external factors, multidimensional quantile regression for industries of the Russian Federation are calculated.Results: six stages of changes in the dynamics of the corporate bond debt market under the influence of the market itself and external factors were highlighted. Periodization made it possible to study the impact of short-term and long-term effects of shocks on the debt market. For the Russian Federation, the volatility weight of the previous period is more than twice the weight of the long-term average volatility. For China, this ratio is even higher. The debt market of the Russian Federation is influenced by the debt markets of China and the United States, but the opposite has not been proven. Three groups of branches of the Russian economy have been formed according to the generality of reaction to external influences.Conclusions and Relevance: during crisis periods, the weight of long-term average market volatility and local factors increases, while that of external factors decreases. Understanding the interactions of internal and external factors allows investors to anticipate market fluctuations, adapt and protect capital. For the Government, this provides an opportunity to develop scientifically sound risk forecasts and use new financial instruments such as yuan bonds.

Resilience and response of anaerobic digestion systems to short-term hydraulic loading shocks: Focusing on total and active microbial community dynamics.

Anaerobic digestion is known to be sensitive to operational changes, such as hydraulic loading shock, yet the impact on the microbiome, particularly the active RNA-based community, has not been fully understood. This study aimed to investigate the performance of anaerobic reactors and their microbial communities under short-term hydraulic loading shocks. Using synthetic wastewater, the reactor was subjected to 24-h shocks at three-fold and seven-fold the baseline loading rate, followed by DNA and RNA analyses to assess the system's resiliency and microbial responses. The research focused on shifts in major microbial groups and their functions, paying close attention to the active RNA community during loading shock events to better reflect the system's immediate condition. Findings indicated that although the microbial community structure, particularly among the archaea, was altered, the reactor quickly regained its balance. Differences were observed between DNA and RNA profiles and between regular and shock loadings; however, the alpha diversity and functions of the overall community were sustained. This study offers important insights for the design and operation of wastewater treatment plants, with the goal of achieving stable and efficient anaerobic digestion systems.

Heat and Cold Shocks Decrease the Incidence of Diapause in Trichogramma telengai Larvae.

Insect diapause and response to thermal stress are similar in the variety of manifestations. However, the influence of thermal shocks on the incidence of insect diapause has not been sufficiently studied. Our laboratory experiments showed that both cold (-10 °C) and heat (43 °C) shocks experienced for at least 20-30 min significantly reduced the incidence of facultative larval winter diapause in the insect egg parasitoid Trichogramma telengai. However, the patterns of these responses were substantially different. In particular, the peaks of the sensitivity to diapause-averting effects of heat and of cold shocks fell, correspondingly, on middle-stage (5 days of development at 15 °C) and late-stage (9-11 days of development at 15 °C) larvae. Heat shocks influence the incidence of diapause mostly via the changes in the initial proportions of diapause-destined and non-diapause-destined individuals, whereas the effect of cold shocks is mostly based on differential mortality (i.e., the difference in mortality among treatments of the same experiment) with better survival of non-diapause-destined individuals. These results elucidate the peculiarities of the interaction between stress and diapause, allowing us to specify the methods for Trichogramma mass rearing and storage.

Characterization of thermal fatigue properties of lead-free Sn–Cu–Al–Mg solder alloy produced by powder metallurgy method

In the present study, lead-free Sn–Cu–Al–Mg-based solder alloys for electronics packaging were produced. Effects of thermal shock and thermal stress on the crack formation in the Sn-based solder alloys were investigated. Lead-free quaternary Sn–Cu–Al–Mg-based solder alloys were produced by using mechanical alloying and powder metallurgy route. Soldering involves using a molten filler metal to wet the surfaces of a joint. Wave soldering is a method for mass assembly of printed circuit boards involving through holes, surface. Lead-free solder alloys must show high wettability, suitable mechanical properties, electrical conductivity, high electrochemical corrosion resistance, and low cost. Mechanical alloying and powder metallurgy method were used in order to prevent formation of intermetallics and formation of voids. Mechanical alloying–powder metallurgy method could reduce the micro/macro-segregation and provide homogeneous microstructure. Initially, elemental metal powders were mechanically alloyed in a ball mill by using zirconia balls in order to produce alloy powders. Then, the alloy powders were compacted at 300 MPa and then the green specimens were sintered at 180 °C for 60 min. Nondestructive ultrasonic tests and eddy current tests were used for characterization of the solder alloy specimens. Elastic modulus of the Sn alloys was determined by ultrasonic measurements. Electrical conductivity of the specimens was determined by using eddy current tests. Microstructure was studied by scanning electron microscope. Effects of thermal shock and thermal stress on the crack formation in the alloys were investigated by heat treatment cycles in a chamber furnace. Heating cycles for thermal stress consist of heating to 150 °C and slow cooling. Heating cycles for the thermal shock consist of heating and quenching. In addition, electrochemical corrosion behaviour of the Sn solder alloys was investigated in NaCl solution.

Alternative investment behavior of households during crises: The effects of the COVID-19 shock on gold purchases in India

Alternative investment behavior of households during crises: The effects of the COVID-19 shock on gold purchases in India

Time-Varying Effects of Financial Uncertainty Shocks on Macroeconomic Fluctuations in Peru

Time-Varying Effects of Financial Uncertainty Shocks on Macroeconomic Fluctuations in Peru

Development of a Quinoa‐Based Fermentation Medium for Propagation of Lactobacillus Plantarum and Weissella Confusa in Opaque Beer Production

Product inconsistency of opaque beer has for long been a tenacious problem in the brewing industry since the current process relies on spontaneous lactic acid fermentation. In order to impede this challenge, there is a need to add lactic acid bacteria (LAB) starter cultures in opaque beer brewing to improve its organoleptic qualities. This study sought to develop a quinoa‐based fermentation medium for propagation of Lactobacillus plantarum and Weissella confusa as potential starter cultures in opaque beer production. An evaluation of the stability and tolerance of the LAB under various stress conditions was also done. Fermentation wort from opaque beer brewing and different quinoa‐based synthetic media with varying nutritional components was prepared for propagation of LAB. Physiochemical analyses which included pH, Brix value and total titratable acidity (TTA) of monocultured and cocultured synthetic media were measured. The measurements were done at 24 h time intervals ranging from 0 to 96 h. Tolerance studies which included the effect of heat shock, cold shock, oxidative stress and osmotic pressure on the survival rate of LAB were conducted to determine the stability of LAB. MRS with L. plantarum monoculture (MRSp) had a notable change in pH from 4.5 to 3.6 after 24 h. The cocultured (M5p + w) synthetic media and cocultured MRS (MRSp + w) also exhibited change in pH from 4.3 to 3.2 and 4.3 to 3.3, respectively, after 72 h. Brix value in all media samples decreased after 24 h except for the uninoculated MRS sample (MRS C). The synthetic and coculture medium (M5p + w) exhibited an increase in TTA (0.79% (m/v) lactic acid) within the first 24 h. Exposure to heat shock had a significance effect (p < 0.05) on the survival rate of L. plantarum and W. confusa. The W. confusa in synthetic media recorded a higher survival rate (27 ± 0.03%) upon exposure to heat shock than L. plantarum (7 ± 0.01%). In contrast, L. plantarum in MRS recorded a higher survival rate (67 ± 0.02%) upon exposure to cold shock and oxidative stress (34 ± 0.01%). The starter cultures tested survived upon exposure to the stress conditions, indicating their potential use in opaque beer production.

Can household energy efficiency dampen crude oil price volatility in the United States?

Even though the effect of oil price shocks on macroeconomics has been extensively investigated, the literature on how efficiency in household energy use affect crude oil price volatility is yet explored. This study unveils whether household energy efficiency lower crude oil price volatility asymmetrically in the United States using the historical and forecast dataset that spans from 1970:Q1-2040:Q1. Applying the multivariate case of Quantile-on-Quantile Regression, the empirical results show that household energy efficiency dampens crude oil price volatility with a stronger connection in quantiles before the median quantiles of crude oil price volatility. However, the effect of household energy efficiency decreases with an increase across quantiles of the crude oil price volatility. The results further show that energy-related CO2 emissions and retail electricity price intensify crude oil price volatility with varying effects across quantiles. These findings are similar to the sensitivity analysis and robustness checks. Overall, the policy implication of our findings is that government and policymakers need to demonstrate unequivocal commitments to improving not only energy-efficient practices at household level but also to mitigate energy-related environmental disasters.

Evaluating the impact of rock damage and induced fracture evolution on heat extraction using supercritical carbon dioxide as the working fluid: Semi-analytical model, numerical model, workflow, economic analysis, and field case

Geothermal energy, a clean and renewable source, has garnered significant attention. The excellent physical properties of supercritical carbon dioxide make it an ideal fluid for geothermal development. Fractures act as channels for the efficient seepage and heat transfer of supercritical carbon dioxide. Consequently, the macroscopic fracture damage and evolution induced by the flow of supercritical carbon dioxide impact heat extraction efficiency. Here, pseudo-pressure (multi-stage induced fracture and non-Darcy multi-stage fractured) and temperature well-testing (multi-stage induced fracture thermal and non-Darcy multi-stage fractured temperature) models are developed to monitor the fractures evolution during heat transfer. The finite element method, superposition principle, and Duhamel principle are utilized to establish the proposed models. Numerical models that either consider or disregard rock damage and fracture evolution are developed to simulate and compare the efficiency of heat extraction. The COMSOL Multiphysics 6.1 software is used to solve a heat extraction transient evaluation model. A workflow for utilizing the developed models is proposed, followed by an economic sensitivity analysis. Finally, the models are applied to field cases in the Babbage Oilfield to guide the extraction of geothermal energy. Core displacement experiments are conducted to validate its accuracy, and a differential economic analysis method demonstrates its economic benefits. Results show that the well-testing models invert parameters related to reservoir and fracture evolution. Rock damage and fracture evolution during a heat extraction process are primarily influenced by thermal stress, thermal shock, and pressure-driven effects. As production progresses, fracture permeability and porosity increase, rock elastic modulus decreases, and production temperature drops. Comparing the results with versus without considering rock damage and fracture evolution reveals that their maximum pressure difference is 14% and their maximum temperature difference is 5%. The production pseudo-pressure has the greatest impact on fracture evolution. The injection temperature has the most significant effect on heat extraction efficiency, followed by injection pressure, fracture permeability, and a mass flow rate, with elastic modulus having the least impact. The maximum differential economic benefit for a single horizontal well injection-production system reaches $293,000. Field case studies from the Babbage Oilfield demonstrate the practicality of the developed models and workflow. In summary, the models, workflow, and economic analysis methods proposed in this work provide guidance for engineers in formulating more optimized heat extraction schemes.